The Web-Based Service Economy and The Internet of Services
From IRF 2008
International Research Forum, 28/29 May 2008, Potsdam, Germany
- International Research Forum on www.sap.com
- Welcome Page: Link
- General contact: Christiane Beck
Service industries have become the biggest and fastest-growing business sector in the world over the last decade. They now employ more people, by far, than any other sector. For this growth to continue, companies are faced with unprecedented pressure to make services more widely and easily available, and to yield higher productivity. This follows restructuring of national economies through deregulation and globalization, forcing companies to focus on core competencies and innovation while lowering total-cost-of-ownership through outsourcing.
Enterprise Service-Oriented Architecture (enterprise SOA) holds the key for businesses in industry verticals to consolidate and repurpose business applications to dynamic market needs. Through a sophisticated software stack, enterprise SOA allows large business applications to be accessed through self-contained, reusable and adaptable enterprise services. Once in place, enterprise services provide the basis for flexible interoperability and can be composed into long-running business processes, spanning intra- and inter-organizational boundaries.
With the maturity of Web services and enterprise SOA investments, new delivery models are emerging for trading services outside traditional ownership and provisioning boundaries.
Following the successes of Amazon and eBay, on-demand, software-as-a-service marketplaces have emerged. Salesforce.com, Employease and Reardon Commerce and others are leveraging the development community and widely available Web services to expand offerings of hosted business applications. In turn, mainstream industries are capitalizing on service-enablement investments by turning to the private sector for value-added service partnerships. As seen through Singapore Government’s TradeExchange, regulatory trade services are being aggregated with services such as logistics and the goods tracking through third parties. Meanwhile, in telecommunications, services are being pushed to “experience” as content and, increasingly, enterprise services become crucial differentiators for slim-margin mobile services.
These developments are setting the stage for the next service-oriented revolution – the Internet of Services. As open service partnerships and service ecosystems have quickly grown, their limitations are clear. The mechanisms for consolidating service delivery are one-off and cannot be reused without large overheads. They result in oligarchies, limiting further service growth to narrow governance and proprietary platforms.
Through the Internet of Services, it is envisaged that these barriers will be removed giving way to a level “playing field” for service supply and access. Beyond ordering books, querying maps, booking flights and the like, commoditized business transactions from mainstream industries are set to take off as the next wave of consumable services. Examples such as property conveyance, business formation and life events (e.g. births and marriage) entail complex integration challenges. They are long-running and implemented through legacy applications hosted by providers. Access to these services requires interactions with backend applications, and several agencies and therefore applications may be involved. Navigation of such services therefore needs to be as seamless for consumers as linking to pages, facilitated by semantic descriptions of services and their interactions.
At the same time, business processes, not just individuals, are expected to be consumers of “cloud” services. When harnessed through business processes, services such as environment sensors and decision-support (data mashups) streamline otherwise “out-of-band” operations like exception handling. They draw businesses processes out of internal stovepipes and rigid B2B interactions, into “real-world” awareness and agility. Ultimately they are rendering tomorrow’s dynamic collaboration and future value networks, as anticipated by service industries and the research community.
